A new season for Olympic Hotel

Fairmont unit buys Seattle landmark

By DAN RICHMAN AND JOHN COOK, SEATTLE POST-INTELLIGENCER REPORTERS

Published 10:00 pm, Thursday, July 3, 2003

Seattle's swanky Four Seasons Olympic Hotel will get a new name and a new owner this fall -- but probably not a new look -- says the company that announced plans yesterday to buy the 79-year-old landmark lodgings.

It plans to buy the 450-room hotel, at 411 University St., from a subsidiary of Chicago-based JMB Realty Corp., in a sale slated to close around July 31.

"The hotel is in great shape, in terms of both earnings and property," said Emma Thompson, Fairmont's executive director of investor relations. She added, though, that the company will elaborate on possible changes to the hotel when the sale closes.

Fairmont owns 41 deluxe hotels in six countries but none in Seattle. Several of its other properties are also historic landmarks, including the Fairmont San Francisco and the Fairmont Banff Springs, Thompson said. The company claims a presence in 11 of the top 25 U.S. hotel markets and has been eyeing Seattle, which ranks among those top markets, for some time, she said.

President John F. Kennedy stayed in the hotel's presidential suite in 1961. The sultan of Brunei rented the biggest room in the hotel during the Asia-Pacific Economic Cooperation forum in 1993.

The number of politicians staying at the hotel dwindled after it went non-union in 1981, according to Walt Crowley, executive director of HistoryLink.org. Because the hotel was originally built with money from the community on land owned by the University of Washington, the elimination of the unions was an extremely controversial issue in the city, Crowley said.

"It has been the venue of so much local history, not just famous visitors, but community events and seminal meetings," Crowley said. "The old tradition in Seattle was if you are going to do something important publicly, you did it at the Olympic Hotel. Just having the event there was almost a seal of approval or credibility for your project."

Rates at the hotel, which was listed on the National Register of Historic Places in 1979, range between $285 and $3,365 per night. The Italian Renaissance-style building features wide, graceful staircases, elaborate chandeliers and marble bathrooms in the executive suites.

Fairmont said it plans to retain as many of the Four Seasons' 600 staff members as possible, including top management.

That rival company -- like Fairmont, based in Toronto -- has managed the hotel since 1980 and said it will continue doing so until the sale closes.

Yesterday Four Seasons Hotels settled a legal dispute with JMB Realty Corp. over whether its management contract would be continued. In a news release, Four Seasons said that because of the settlement, it will receive a payment of undisclosed size at the sale's close and will continue receiving payments for several years, the total value of which "will, in aggregate, compensate it for the near-term value of its management contract."

Fairmont said it was waiting until the dispute was settled to move forward with the transaction, which remains subject to financing contingencies.

The buyer of record yesterday was Legacy Hotels Real Estate Investment Trust, an affiliate of Fairmont Hotels & Resorts Inc. Legacy actually bought not the hotel's building or land -- those are owned by the University of Washington -- but a lease from the university that runs through 2040.

The seller was Urban Four Seasons Hotel Venture LP, which Thompson said is a subsidiary of JMB Realty Corp.

JMB had been considering selling its interest in the hotel for nearly a year. But changes in management is nothing new for the hotel, which has had numerous operators since it was constructed for $5.5 million in 1924.

The original managers went into receivership during the Great Depression. Western Hotels, the forerunner of Westin, took over in 1955. It sold the management contract 24 years later to Four Seasons Hotels, according to HistoryLink.org.

Facing competition from newer hotels, the hotel underwent a $62-million renovation in the early 1980s that reduced the number of rooms from 810 to 450.

Jeff Rhodes, a developer who worked on the renovation project, said the hotel is one of the most important buildings in the city.

"I am very proud to be able to take a picture in front of that hotel," said Rhodes. "It is one of the greatest projects ever done in Seattle."

With Fairmont Hotels taking over management, Rhodes said a new era has begun.